Adams' Equity Theory: Meaning and Application

John Stacey Adams, a workplace and behavioral psychologist, created his theory of employment incentives in 1963 and called it "Adams' Equity Theory." Adams' Equity Theory recognizes that subtle and varied elements affect an employee's perspective of their relationship with their work and their employer, like many of the more prominent theories of motivation (such as Maslow's Hierarchy of Needs and Herzberg's Two-Factor Theory). According to this hypothesis, employees lose interest in their work and their employer if they see a negative gap between their effort and the results they see. Employees can respond in several ways, such as becoming less motivated, putting in less effort, getting annoyed, or even causing trouble.

What does Adams' Equity Theory Define?

Adams' argument boils down to the idea that people seek a balanced exchange of effort for reward. That is, people want their labor's outputs (rewards) to appear proportional to the inputs (contributions) they make. They would like to see others rewarded in the same way they would be rewarded if they made comparable contributions. Adams' equity hypothesis, in its simplest form, asserts that members of the working population seek uniformity in the pay level they receive for their efforts. Then, people might keep their drive, and when this is no longer the case, people may lose their drive.


A person's "inputs" might be defined as actions to aid a group's efforts in reaching a common objective. These are the individuals' contributions to the company. The typical workweek is the first thing that comes to mind. There is, however, a great deal more to it than this. Inputs can be thought of as a wide variety of things. Resources such as time, schooling, experience, loyalty, hard work, resilience, flexibility, resolve, excitement, adaptation, tolerance, group support, trust in leaders, and the readiness to follow them are all necessary. These contributions account for manual effort and a broad category of activities typically classified as "emotional labor." Contribution can be any physical or mental exertion that aids an organization in achieving its objectives.


A person's efforts to aid a group in reaching its objective are rewarded in the form of material and nonmaterial benefits. What the company or its representatives give to an individual salary or other monetary contribution in exchange for time is often the first item that comes to mind. Although monetary compensation is an important factor, there is more to consider. Different kinds of inputs can be considered for various purposes. Salary, benefits, job security, routine, recognition, responsibility, a sense of community, praise, appreciation, acknowledgment, challenging work, training, education, pride in one's accomplishments, opportunities for advancement, and a sense of purpose are all examples. Workers think of benefits as anything they get from their employer that improves their lives.

Things That Need to be Fair

Fairness and the concept of comparison are introduced in Adams' Equity Theory of Motivation. A fair working partnership must satisfy two criteria

  • First, people must believe that their compensation is fundamentally equitable.

  • Second, they must believe that their compensation is on par with their colleagues inside the organization and that it fairly reflects the value they add to the company.

Both conditions must be met for there to be a possibility of a just and equitable working relationship. In this way, people will likely be inspired.

Test 1: The Equity of Reward and Input

Equality of treatment requires first looking at how much value each person adds relative to what they get in return. If people are to feel like they are being treated fairly at work, they must believe that the rewards they are receiving are commensurate with the effort they have put into their job. Cultural norms and expectations impact people's conception of a just reward. When evaluating the justness of their salary, most people look at similar jobs in similar fields. The comparisons make sense because these are all viable options for how they could spend their time. A person will feel treated fairly if they believe their rewards are proportional to their effort. Therefore, it is likely that they will be inspired to act.

Test 2: The Equity of Reward and Peer Reward

The second fairness criterion to examine is how a person's return on investment compares to that of their peers. The term "social comparison" describes this kind of evaluation. For a sense of fairness, people need to believe that their returns on investment are roughly comparable to those of their peers. When this occurs, people may feel they are being treated fairly, boosting their motivation.

What the Model means for Individuals?

Adams' Equity Theory of Motivation says people get upset if they are not compensated for their work. From a person's perspective, equality and fairness are vital. Ensure your pay reflects your value to your employer to avoid feeling underappreciated. If you feel life is not treating you fairly, examine what you want to change. Once you know what you need to feel fair, talk to your line manager to see what can be done. If things are that out of whack, you may need new employment.

What the Model means for Organizations?

Adams' equity theory of motivation is widely used in HR and organizational decision-making. Fairness is vital for motivation, so the model helps firms think about their employee connections. Organizational fairness and justice in dealing with employees are vital for engagement, motivation, retention, and overall productivity.


Adams' Equity Theory is like Maslow's hierarchy of needs and Herzberg's classification of two types of motivation (intrinsic and extrinsic). Workers will be more productive and engaged if they feel like they are being treated fairly. They attribute this feeling of justice to a combination of their efforts and the results they have gotten from those efforts. Finding a happy medium is central to Adams' equity theory. If the scales are tipped too much in the company's direction, certain workers may demand higher pay or more recognition from management. People around them will lose inspiration, and some might even leave for other jobs.

Updated on: 06-Jan-2023


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